Electronic Filing- Recived, Clerk's Office: 10/1712013 

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD 

ILLINOIS POWER HOLDINGS, LLC and ) 

AMERENENERGY MEDINA VALLEY ) 

COGEN,LLC; ) 

AMEREN ENERGY 

RESOURCES, LLC 

Petitioners, 

Co-Petitioner, 

v. 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

PCB No. 14-10 

(Variance- Air) 

NOTICE OF FILING 

To: ALL PARTIES ON THE ATTACHED SERVICE LIST 

PLEASE TAKE NOTICE that we have today electronically filed with the Office of the 

Clerk of the Illinois Pollution Control Board a MOTION TO FILE INSTANTER and 

PEmiONERS' AND CO.PETIDONER'S POST-HEARING COMMENT, copies of which are 

herewith served upon you. 

ILLINOIS POWER HOLDINGS, LLC 

Dated: _October 17, 2013 

AMEREN ENERGY RESOURCES, LLC 

and AMERENENERGY MEDINA 

VALLEY COGEN, LLC 

'q ATTACHMENT---
Electronic Filing- Recived, Clerk's Office: 10/17/2013 

BROWN, HAY & STEPHENS, LLP 

Claire A. Manning 

William D. Ingersoll 

205 S. fifth Street, Suite 700 

P.O. Box 2459 

Springfield, IL 62705-2459 

(217) 544-8491 

Fax: (217)241-3111 

cmanning@Qhslaw.com 

win gc:rsoll(cl)bhsla w .com 

..... 

,...; \ 

' I ' 

SCill.F.F HARDIN, LLP 

Renee Cipriano 

Amy Antoniolli 

233 South Wacker Drive, Suite 6600 

Chicago, fllinois 60606 

312-258-5550 

Fax: 312-258-5600 

rcipJiano:cl:!schifillardL[).conl 

aanto n i olli'inschi ffhardin .com 
Electronic Filing- Recived. Clerk's Office: 10/1712013 

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD 

ILLINOIS POWER HOLDINGS, LLC and ) 

AMERENE:N"ERGY MEDINA VALLEY ) 

COGEN, LLC; ) 

Petitioners, 

AMEREN ENERGY 

RESOURCES, LLC 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Co-Petitioner, 

v. 

PCB No. 14-10 

(Variance - Air) 

ILLINOIS ENVIRONMENTAL 

PROTECTION AGENCY, 

Respondent. 

MOTION TO FILE INSTANTER 

NOW COME Petitioners, ILLINOIS POWER HOLDINGS, LLC ("IPH'') and 

A.MERENENERGY MEDlNA VALLEY COGEN, LLC ("MEDINA VALLEY'') and CoPetitioner, AMEREN ENERGY RESOURCES, LLC ("AER'') by and through their attorneys, 

BROWN, HAY and STEPHENS, LLP and SCHIFF HARDIN, LLP, and pursuant to 35 Ill. 

Adm. Code 101.522, and respectfully state as follows: 

1. Section 101.522 of the Illinois Pollution Control Board's ("Board") procedural 

rules provides; 

The Board or hearing officer, for good cause shown on a motion 

after notice to the opposite party, may extend the time for filing 

any document or doing any act which is required by these rules to 

be done within a limited period, either before or after the 

expiration of time. 35lll. Adm. Code 101.522. 
Electronic Filing- Recived, Clerk's Office: 10/1712013 

2. During this proceeding, the Petitioners and Co-Petitioner explained that approval 

of the transaction by the Federal Energy Regulatory Commission ("FERC") was "a mandatory 

regulatory and contractual condition" but that they expected FERC approval sometime during the 

Fourth Quarter of2013, in sufficient time to execute a Certification of Acceptance in this 

variance proceeding. See Petitioners' and Co-Petitioner's Responses to Illinois Pollution Control 

Board's Question Set Forth in Hearing Officer Order of September 12, 2013 (filed on September 

16, 2013). 

3. Nonetheless, some public comrnenters in this proceeding raised issues related to 

whether such approval would actually occur. See Public Comment# 2336, at. p. 4-5; Public 

Comment# 2337, at p. 20. 

4. A public hearing was held in this matter on September 17, 2013. Post-heating 

comments from public commenters were due on September 24, 20 13. Post-hearing comments of 

the parties were due on October 7, 2013. All filings have been timely made and the record, 

therefore, is presumed to be closed. 

5. On October 11, 2013, FERC issued an order authorizing the proposed transfer of 

energy centers from AER to IPH and Medina Valley. 

6. The Petitioners and Co-Petitioner state that because FERC' s issuance of the 

above-referenced Order relates directly to an issue raised in this proceeding, and will provide the 

Boatd with a more complete record, good cause is shown for an extension of lime to allow 

Petitioners and Co-Petitioner the opportunity to provide the Board with the FERC approval 

decision, which it files concurrently with this motion. 
Electrllnic Filing- Recived. Clerk's Office: 10/17/2013 

WHEREFORE, the Petitioners and Co-Petitioner respectfully request that the Pollution 

Control J3oard grant this Motion to File Instanter and accept their Post -Hearing Comment as 

timely filed. 

Respectfully submitted, 

ILLINOIS PO\"VER HOLDINGS, LLC 

BROWN, HAY & STEPHENS, LLP 

Claire A. Manning 

William D. Ingersoll 

205 S. Fifth Street, Suite 700 

P.O. Box 2459 

Springfield, IL 62705-2459 

(217) 544-8491 

Fax: (217)241-3111 

cmanning(abhslaw.com 

winrrersoJI(a',bhslaw.com 

AMEREN ENERGY RESOURCES, LLC 

and AMERENENERGY MEDINA 

VALLEY COGEN, LLC 

SCHIFF HARDIN, LLP 

Renee Cipriano 

Amy Antoniolli 

233 South Wacker Drive, Suite 6600 

Chicago, Illinois 60606 

312-258-5550 

Fax: 312-258-5600 

rcipriano@;s.;hiffuardin.com 

aantoniolli@schiffum-din.com 
Electronic Filing- Recived. Clerk's Office: 10/17/2013 

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD 

ILLINOIS POWER HOLDINGS, LLC and ) 

AMERENENERGY MEDINA VALLEY ) 

COGEN, LLC, ) 

Petitioners, ) 

) 

AMEREN ENERGY ) 

RESOURCES, LLC ) 

Co-Petitioner, ) 

) 

~ ) 

) 

ILLINOIS ENVIRONMENTAL ) 

PROTECTION AGENCY, ) 

Respondent. ) 

PCB No. 14-10 

(Variance- Air) 

POST-HEARING COMMENT OF ILLINOIS POWER HOLDINGS, LLC, 

AMERENENERGY MEDINA VALLEY COGEN, LLC, AND At'\1EREN ENERGY 

RESOURCES, LLC. 

NOW COME Petitioners, ILLINOIS POWER HOLDINGS, LLC ("IPH") and 

AMERENENERGY MEDINA VALLEY COGEN, LLC ("Medina Valley"), and Co-Petitioner, 

AMEREN ENERGY RESOURCES ("AER"), by and through their attorneys and pursuant to 

Section 104.224(d) of the Illinois Pollution Control Board's ("Board") procedural rules (35 Ill. 

Adm. Code 104.224(d)). On October 11, 2013, the United States Federal Energy Regulatory 

Commission ("FERC") issued an order authorizing the Proposed Transaction as consistent with 

public interest.1 The Proposed Transaction that is the subject of the Order is the same transaction 

that is the subject of this PCB 14-10 proceeding, and was put into evidence as Exhibit B of the 

Motion to Substitute Parties in PCB 12-126. Among its findings, FERC found that the Proposed 

Transaction would not create horizontal or vertical market concerns, 

2 and will not have an 

1 A copy of the order, Order Authorizing Disposition of Jurisdictional Facilities and Acquisition of Securities, 

ECI3-93-000, (Oct II, 2013) \'Order"), is attached to this comment. 

2 Order, p. 19, 23. 
Electronic Filing- Recived. Clerk's Office: 10/1712013 

adverse effect on rates. 3 The Order is in effect and remains in effect throughout any rehearing 

process.

4 

Ms. Faith Bugel, on behalf of the Environmental Law and Policy Center, Natural 

Resources Defense Council, Respiratory Health Association, and Sierra Club (collectively, the 

"ELPC"), asserted in post-hearing comments that the Proposed Transaction is hypothetical, in 

part, because PERC had not yet authorized the transaction. 5 Likewise, Mr. James Gignac, of the 

Illinois Office of the Attorney General, relied on the pending FERC approval in arguing the 

Proposed Transaction does not provide assurance of when the Petitioners will assume ownership 

of the energy centers. 6 PERC's authorization of the transaction is further evidence that the 

nature of the Proposed Transaction is very real, and is now one step closer to consummation. As 

stated previously, Petitioners and Co-Petitioner expect the transaction to close before the end of 

the year, assuming a favorable decision from the Board. 

WHEREFORE, Petitioners, Illinois Power Holdings, LLC and AmerenEnergy Medina 

Valley Cogen, LLC, and Co-Petitioner, Ameren Energy Resources, LLC, respectfully request 

that the Illinois Pollution Control Board accept this comment as a supplement to its post-hearing 

brief. 

3 Order, p. 29. 

4 18 C.F.R. 385.713(e). 

5 PC#2337, p. 20, fn. 13. 6 PC#2336, p. 4-5. 

2 
EIBctronic Filing- RBcivBd, CIBrk's Offic8: 10/1712013 

Respectfully submitted, 

ILLINOIS POWER HOLDINGS, LLC 

BROWN, HAY & STEPHENS, LLP 

Claire A. Manning 

William D. Ingersoll 

205 S. Fifth Street, Suite 700 

P.O. Box 2459 

Springfield, IL 62705-2459 

(217) 544-8491 

Fax: (217)241-3111 

cmanning@bhslaw.com 

wingersoll@bhslaw.com 

3 

AMEREN ENERGY RESOURCES, LLC 

and AMERENENERGY MEDINA 

VALLEY COG EN, LLC 

By:~~ O~eir Attorneys 

SCHIFF HARDIN, LLP 

Renee Cipriano 

Amy Antoniolli 

233 South Wacker Drive, Suite 6600 

Chicago, Illinois 60606 

312-258-5550 

Fax: 312-258-5600 

rcipriano@schiffhardin.com 

aantoniolli@schiflhardin.com 
Electronic Filing- Recived. Clerk's Office: 10/1712013 

CERTIFICATE OF SERVICE 

I, William D. Ingersoll, certify that I have this date served the attached Notice of Filing, 

Motion to File Instanter and Petitioners' and Co-Petitioners's Post Hearing Comment, by means 

described below, upon the following persons: 

To: Pollution Control Board, Attn: Clerk 

I 00 West Randolph Street 

James R. Thompson Center, Suite 11-500 

Chicago, lllinois 60601-3218 

(Via Electronic Filing) 

Carol Webb 

Hearing Officer 

Illinois Pollution Control Board 

1021 North Grand Avenue East 

P.O. Box 19274 

· Springfield, illinois 62 794-9274 

webbc@ipcb.state.il.us 

(Via First-Class Mail and Email) 

Faith E. Bugel 

Andrew Armstrong 

35 E. Wacker Drive, Suite 1600 

Chicago, illinois 60601 

fbugel@elpc.org 

aarmstrong@elpc.org 

(Via First-Class Mail and Email) 

Dated: September 17, 2013 

BROWN, HAY & STEPHENS, LLP 

William D. Ingersoll 

Registration No. 6186363 

wingersoll@bhslaw.com 

205 S. Fifth Street, Suite 700 

P.O. Box 2459 

Springfield, IL 62705-2459 

(217) 544-8491 

Gina Roccaforte 

Division of Legal Counsel 

illinois Environmental Protection Agency 

1021 North Grand Avenue, East 

P.O. Box 19276 

Springfield, Illinois 62794-9276 

Gina.roccaforte@illinois.gov 

(Via First-Class Mail and Email) 

Renee Cipriano 

Amy Antoniolli 

SCHIFF HARDIN, LLP . 

233 South Wacker Drive, Suite 6600 

Chicago, lllinois 60606 

AAntoniolli@schiffhardin.com 

(Via First-Class Mail and Email) 

By: Is/William D. Ingersoll 

William D. Ingersoll 
20131011-303S FERC PJI~gt~~Pi~fJ!ipQ.~ ~rrJ~rP· Clerk's Office: 10/17/2013 

145 PERC~ 61,034 

UNITED STATES OF AMERICA 

FEDERAL ENERGY REGULATORY COMMISSION 

Before Commissioners: Jon Wellinghoff, Chairman; 

Philip D. Moeller, John R. Norris, 

Cheryl A. LaFleur, and Tony Clark. 

Ameren Energy Generating Company 

AmerenEnergy Resources Generating Company 

Ameren Energy Marketing Company 

Electric Energy, Inc. 

Midwest Electric Power, Inc. 

AmerenEnergy Medina Valley Cogen, L.L.C. 

Dynegyinc. 

Docket No. EC 13-93-000 

ORDER AUTHORIZING DISPOSITION OF 

JURISDICTIONAL FACILITIES MTI 

ACQUISITION OF SECURITIES 

(Issued October 11, 2013) 

1. On April16, 2013, Ameren Energy Generating Company (Ameren Energy 

Generating), AmerenEnergy Resources Generating Company (Ameren Resources 

Generating), Ameren Energy Marketing Company (Ameren Marketing), Electric Energy, 

Inc. (Electric Energy), Midwest Electric Power, Inc. (Midwest Power and, together with 

Ameren Energy Generating, Ameren Resources Generating, Ameren Marketing and 

Electric Energy, the Ameren Merchant Utilities), AmerenEnergy Medina Valley Cogen, 

L.L.C. (Medina Valley), and Dynegy Inc. (Dynegy and, together with the Ameren 

Merchant Utilities and Medina Valley, Applicants), filed an application under 

sections 203(a)(1) and 203(a)(2) of the Federal Power Act (FPA)1 requesting 

authorization for a multi-step transaction in which a special purpose subsidiary of 

Dynegy, Illinois Power Holdings, LLC (Illinois Power Holdings), will acquire all of the 

equity interests indirectly owned by Ameren Corporation (Ameren) in th~ Ameren 

I 16 U.S. C.§ 824b (2006). 
Electronic Filing- Recived, Clerk's Office: 10/17/2013 

20131011-3038 FERC PDF \Unofficial) .c0/11/2013 

Docket No. EC 13-93-000 -2-

Merchant Utilities (Proposed Transaction). 2 Applicants supplemented the Application on 

May 9, 2013 and on August 5, 2013. The Commission has reviewed the Proposed 

Transaction under the Commission's Merger Policy Statement.3 As discussed below, we 

will authorize the Proposed Transaction as consistent with the public interest. 

I. Background 

A. Description ofthe Parties 

1. Ameren, the Ameren Merchant Utilities, and Affiliates 

2. Applicants state that Ameren is a public utility holding company that, among other 

things, owns two traditional load-serving electric utilities, Ameren Illinois Company 

(Ameren Illinois) and Union Electric Company, as well as interests in the Ameren 

Merchant Utilities and two other public utilities, Medina Valley and Ameren 

Transmission Company of Illinois (Ameren Transmission Illinois). 

3. Applicants state that Ameren Illinois is a direct, wholly-owned public utility 

subsidiary of Ameren engaged in: (i) the transmission and sale of electric energy subject 

to the Commission's jurisdiction; and (ii) the provision of retail electric and natural gas 

service in Illinois under the jurisdiction of the Illinois Commerce Commission (Illinois 

Commission). Applicants state that transmission service on the Ameren Illinois 

2 Joint Application for Authorization under Section 203 of the Federal Power Act 

and Request for Expedited Consideration, Docket No. ECB-93-000 (Application). 

3 Inquiry Concerning the Commission's Merger Policy Under the Federal Power 

Act: Policy Statement, Order No. 592, FERC Stats. & Regs. ~ 31,044 ( 1996), 

reconsideration denied, Order No. 592-A, 79 FERC ~ 61,321 (1997) (Merger Policy 

Statement). See also FPA Section 203 Supplemental Policy Statement, FERC Stats. 

& Regs. '\[31,253 (2007) (Supplemental Policy Statement). See also Revised Filing 

Requirements Under Part 33 of the Commission's Regulations, Order No. 642, FERC 

Stats. & Regs.~ 31,111 (2000), order on reh 'g, Order No. 642-A, 94 FERC '\[61,289 

(2001). See also Transactions Subject to FPA Section 203, Order No. 669, FERC Stats. 

& Regs. '\[31 ,200 (200 5), order on reh 'g, Order No. 669-A, FERC Stats. & Regs. 

~ 31,214, order on reh 'g, Order No. 669-B, FERC Stats. & Regs. '\[31,225 (2006). 
Electronic Filino - Recived, Clerk's Office: 10/17/2013 

20131011-3038 FERC PDF (Unofficial) ".i.0/11/2013 

Docket No. EC13-93-000 - 3 -

transmission system is provided pursuant to the Midwest Independent Transmission 

System Operator Inc. (MISO) Tariff.4 

4. Applicants state that Union Electric Company is a direct, wholly-o\\>ned public 

utility subsidiary of Ameren engaged in: (i) the generation, transmission, and sale of 

electric energy subject to the Commission's jurisdiction; and (ii) the provision of retail 

electric and gas service in central and eastern Missouri under the jurisdiction of the 

Missouri Public Service Commission. Applicants state that transmission service on the 

Ameren Missouri transmission system is provided pursuant to the MISO Tariff. 

5. Applicants state that Ameren Transmission Illinois is a transmission-only 

subsidiary of Ameren that provides transmission service under the MISO Tariff in the 

Ameren Illinois pricing zone ofMISO. 

6. Applicants state that Medina Valley is a wholly-owned subsidiary of Ameren. It 

currently does not O\\>TI any generation capacity, but it is authorized to make sales at 

market-based rates. Applicants state that Medina Valley is not one of the Ameren 

Merchant Utilities, and Dynegy will not acquire it in the Proposed Transaction. 

Applicants state, however, that Medina Valley will acquire from Ameren Energy 

Generating three active gas-fired generating facilities (the Grand Tower Energy Center, 

the Gibson City Energy Center, and Elgin Energy Center) and two mothballed generating 

facilities (the Hutsonville Plant and the Meredosia Plant) after Commission approval of, 

but prior to, closing of the Proposed Transaction. Applicants state that, as a result, these 

facilities will not be among those acquired by Dynegy in the Proposed Transaction. 

7. Applicants state that Ameren Energy Resources Company, LLC (Ameren 

Resources) is a wholly-owned intermediate holding company through which Ameren 

owns indirect interests in the Ameren Merchant Utilities, which are described below. 

a. Ameren Energy Generating 

8. Applicants state that Ameren Energy Generating, a wholly-owned subsidiary of 

Ameren Resources, has received market-based rate authority from the Commission. 

Arneren Energy Generating currently owns (excluding Electric Energy and Midwest 

Power) approximately 3,293 MW of generation capacity (summer rating) located in 

Illinois, Applicants state that all of this generation is located within the MISO balancing 

authority area, with the exception of the 452 MW (summer rating) Elgin Energy Center 

which is located near Elgin, Illinois within the PJM Interconnection, LLC (PJM) 

4 Effective April26, 2013, MISO changed its name from "Midwest Independent 

Transmission System Operator, Inc." to "Midcontinent Independent System Operator, 

Inc." 
· Electronic Filino- Recived. Clerk's Office: 10/1712013 

20131011-3038 FERC PDF (Unofficial) "::1.0/11/2013 

Docket No. EC13-93-000 - 4 -

balancing authority area. Applicants state that Ameren Energy Generating sells 

100 percent of the output of its generating facilities to Arneren Marketing, 

b. Ameren Resources Generating 

9. Applicants state that Ameren Resources Generating, a wholly-owned subsidiary of 

Ameren Resources, has received market-based rate authority from the Commission. 

Applicants state thatAmeren Resources Generating owns approximately 1,060 MW of 

capacity within the MISO balancing authority area, and that it sells 100 percent of the 

output from its generating facilities to Ameren Marketing. 

c. Ameren Marketing 

10. Applicants state that Ameren Marketing, a wholly-owned subsidiary of Ameren 

Resources, has received market-based rate authority from the Commission. Applicants 

state that Ameren Marketing is a power marketer and does not own any generation 

capacity. However, through long-term power sales agreements with Ameren Energy 

Generating, Ameren Resources Generating, and Electric Energy, Arneren Marketing 

currently controls approxinlately 5,600 MW of capacity. The Commission has granted 

Ameren Marketing waivers to sell electric capacity and energy to its affiliates under 

certain circumstances. 5 Applicants state that in addition to making wholesale sales, 

Ameren Marketing is engaged in retail marketing in the State of Illinois and is regulated 

by the Illinois Commission as an Alternative Retail Electric Supplier. 

d. Electric Energy 

11. Applicants state that Electric Energy owns and operates coal and gas-fired 

. generating units having a combined capacity of approximately 1,167 MW (summer 

rating), located in Joppa, Illinois (Joppa Facility). Applicants state that Ameren Energy 

Generating owns an 80 percent equity interest in Electric Energy, and an unaffiliated 

utility, Kentucky Utilities, owns the remaining 20 percent interest. Electric Energy is an 

exempt wholesale generator and has received market-based rate authority from the 

Commission. Applicants state that Electric Energy owns six parallel transmission lines 

approximately eight miles long that interconnect the Joppa Facility with the MISO, 

Tennessee Valley Authority (TV A), and Louisville Gas & Electric (LG&E)/Kentucky 

Utilities balancing authority areas through a Department of Energy transmission bus in 

Paducah, Kentucky. Applicants state that, because the lines that Electric Energy owns 

could conceivably be used by an unaffiliated third party for transmission service, the 

5 See Ameren Energy Marketing Co., Docket No. ER0&-651-000 (May 9, 2008) 

(delegated letter order); Ameren Energy Marketing Co., Docket No. ER0?-361-000 

(May 31, 2007) (delegated letter order). 
Docket No. EC13-93-000 - 5 -

Commission has required Electric Energy to file an Open Access Transmission Tariff 

(OATT), but the Commission has granted waiver of certain other transmission owner 

requirements. 

e. Midwest Power 

12. Applicants state that Midwest Power is a wholly-owned subsidiary of Electric 

Energy. Applicants state that it owns and operates two gas turbines with a total capacity 

of approximately 74 MW (summer rating) located in Joppa, Illinois. Applicants state that 

all of the output of Midwest Power's generating facilities is sold to Electric Energy IIDder 

a cost-based, long-term sales agreement. Applicants state that Midwest Energy does not 

have any other rate schedules in effect. 

2. Dynegy, the Dynegy Public Utilities, and Other Dynegy 

Generation 

13. Applicants state that Dynegy is a public utility holding company. Applicants state 

that Dynegy controls approximately 11,400 MW of electric generation and produces and 

sells electric energy, capacity, and ancillary services in U.S. markets through public 

utilities and other generation-owning subsidiaries, as described below.6 

a. Casco Bay Energy Company, LLC 

14. Applicants state that Casco Bay Energy Company, LLC (Casco Bay) is an 

indirect, wholly-owned subsidiary ofDynegy. It is an exempt wholesale generator that 

owns and operates the Maine Independence Station, a natural gas-fired, combined cycle 

generating facility with a net capacity of 490 MW (summer rating), located in Veazie, 

Maine. Applicants state that Maine Independence Station is interconnected with the 

transmission grid controlled by ISO New England Inc. Applicants state that Casco Bay 

has received authority from the Commission to sell energy, capacity, and certain ancillary 

services at market-based rates. 

b. Dynegy Danskammer, L.L.C. 

15. Applicants state that Dynegy Danskammer, L.L.C. (Dynegy Danskammer) is an 

indirect, wholly-owned subsidiary ofDynegy. It is an exempt wholesale generator that 

leases, owns, and operates, and has the right to the output from, the Danskammer 

Generating Station, a coal-, gas-, and oil-fired electric generating facility with a net 

capacity of 497 MW (summer rating), located in Orange, New York. Applicants state 

6 Dynegy is approximately 35 percent controlled by investment management 

subsidiaries of Franklin Resources, Inc., an investment management company. 

Application at n.11. 
Electronic Filinn - Recived. Clerk's Office: 10/1712013 

20131011-3038 FERC PDF (Unorric>a~)"~o/ilT2013 

Docket No. EC13-93-000 - 6-

that Danskammer Generating Station is interconnected with the transmission grid 

controlled by the New York Independent System Operator, Inc. (NYISO). The 

Commission has authorized Dynegy Danskammer to sell energy, capacity, and certain 

ancillary services at market-based rates. Applicants state that the Danskammer 

Generating Station is not in operation, and the Commission has recently authorized 

Dynegy Danskammer to acquire title to units of the Danskammer Generating Station that 

it currently leases and to sell the entire Danskammer Generating Station to an unaffiliated 

third party for purposes of demolition. 7 

c. Dynegy Kendall Energy. LLC 

16. Applicants state that Dynegy Kendall Energy, LLC (Dynegy Kendall) is an 

indirect, wholly-owned subsidiary ofDynegy. Applicants state that it is an exempt 

wholesale generator that ovms and operates the Kendall County Generation Facility, a 

natural gas-fired electric generating facility with a net capacity of 1,140 MW (summer 

rating), located in Kendall, Illinois. Applicants state that the Kendall County Generation 

Facility is interconnected with the transmission grid controlled by PJM. The 

Commission has authorized Dynegy Kendall to sell energy, capacity, and certain 

ancillary services at market-based rates. Applicants state that Dynegy Kendall also has a 

rate schedule for cost-based reactive power compensation. 

d. Dynegy Marketing and Trade, LLC 

17. Applicants state that Dynegy Marketing and Trade, LLC (Dynegy Marketing and 

Trade) is an indirect, wholly-owned subsidiary ofDynegy. Applicants state that it is a 

power marketer and currently controls 200 MW of a unit in PJM owned by its affiliate, 

Dynegy Kendall, under a long-term capacity and energy purchase agreement that 

Constellation Energy Commodities Group, Inc. assigned to Dynegy Marketing and 

Trade. The Commission has authorized Dynegy Marketing and Trade to sell energy, 

capacity, and certain ancillary services at market-based rates. 

e. Dynegy Midwest Generation, LLC 

18. Applicants state that Dynegy Midwest Generation, LLC (Dynegy Midwest 

Generation) is an indirect, wholly-owned subsidiary ofDynegy. Applicants state that it is 

7 On March 11, 2013, the Commission authorized the disposition of the 

Danskammer Generating Station. Dynegy Danskammer, LLC, 142 FERC "i[62,197 

(2013). The Commission was informed on September 5, 2013 that the disposition 

authorized would not be occurring. On September 9, 2013, Dynegy Danskammer filed a 

new application to request authorization for disposition of the Danskammer Generating 

Station in Docket No. EC13-144-000. That application is pending. 
Electronic Filino- Recived, Clerk's Office: 10/1712013 

20131011-3038 FERC PDF (Unofficial) ~0/11/2013 

Docket No. EC13-93-000 - 7 -

an exempt wholesale generator that owns and operates six fossil-fueled generating 

facilities at various locations in Illinois with a total capacity of approximately 2,980 MW. 

Applicants state that Dynegy Midwest Generation's facilities are interconnected with the 

transmission grid controlled by MISO. Applicants state that Dynegy Midwest Generation 

is authorized to sell energy, capacity, and certain ancillary services at market-based rates. 

Applicants state that Dynegy Midwest Generation also has a rate schedule for cost-based 

reactive power compensation. 

f. Dynegy Morro Bay, LLC 

19. Applicants state that Dynegy Morro Bay, LLC (Dynegy Morro Bay) is an indirect, 

wholly-ovmed subsidiary ofDynegy. Applicants state that it is an exempt wholesale 

generator that ovms and operates the Morro Bay Power Plant, which consists of natural 

gas-fired generating units with a combined net capacity of 650 MW (summer rating), 

located in Morro Bay, California. Applicants state that the Morro Bay Power Plant is 

interconnected with the transmission grid controlled by the California Independent 

System Operator Corporation (CAISO). The Commission has authorized Dynegy Morro 

Bay to sell energy, capacity, and certain ancillary services at market-based rates. 

g. Dynegy Moss Landing, LLC 

20. Applicants state that Dynegy Moss Landing, LLC (Dynegy Moss Landing) is an 

indirect, wholly-owned subsidiary ofDynegy. It is an exempt wholesale generator that 

owns and operates the Moss Landing Power Plant, which consists of natural gas-fired 

combined cycle/conventional steam generating units with a combined capacity of 

2,529 MW (summer rating), located in Monterey County, California. Applicants state 

that the Moss Landing Power Plant is interconnected with the transmission grid 

controlled by CAISO. The Cornn1ission has authorized Dynegy Moss Landing to sell 

energy, capacity, and certain ancillary services at market-based rates. 

h. Dynegy Oakland, LLC 

21. Applicants state that Dynegy Oakland, LLC (Dynegy Oakland) is an exempt 

wholesale generator that O\vns and operates the Oakland Power Plant, which consists of 

oil-flred generating units with a combined capacity of 165 MW (summer rating), located 

in Oakland, California. Applicants state that the Oakland Power Plant is interconnected 

with the transmission grid controlled by CAISO. The Cornn1ission has authorized 

Dynegy Oakland to sell energy, capacity, and certain ancillary services at market-based 

rates. In addition, Applicants state that Dynegy Oakland is ~ubject to a cost-based 

Reliability Must-Run agreement with CAISO. 

i. Dynegy Power Marketing, LLC 

22. Applicants state that Dynegy Power Marketing, LLC is an indirect, wholly-owned 

subsidiary ofDynegy and a power marketer. Applicants state that it has received 
Electrllnic Filin[J - RecivBd, CIBrk's OfficB: 10/1712013 

20131011-3038 FERC PDF Tunofficial) 'i'0/11/2013 

Docket No. EC13-93-000 - 8 -

authority from the Commission to sell energy, capacity, and certain ancillary services at 

market-based rates. 

j. Dynegy Roseton, L.L.C. 

23. Applicants state that Dynegy Roseton, L.L.C. (Dynegy Roseton) is an indirect, 

wholly-owned subsidiary ofDynegy. Applicants state that it is an exempt wholesale 

generator that leases, operates, and has the right to the output from the Roseton 

Generating Station, a natural gas- and oil-fired electric generating facility with a net 

capacity of 1,213 MW (summer rating), located in Orange, New York. Applicants state 

that the Roseton Generating Station is interconnected with the transmission grid 

controlled by NYISO. The Commission has authorized Dynegy Roseton to sell energy, 

capacity, and certain ancillary services at market-based rates. The Commission has 

recently authorized Dynegy Roseton to acquire title to the Roseton Generating Station 

from its passive lessor and to sell the entire facility to an unaffiliated third party.8 

k. Ontelaunee Power Operating Companv. LLC 

24. Applicants state that Ontelaunee Power Operating Company, LLC (Ontelaunee 

Power) is an indirect, wholly-owned subsidiary ofDynegy. Applicants state that it is an 

exempt wholesale generator that owns and operates the Ontelaunee Energy Center, a 

natural gas-fired electric generating facility with a net capacity of 516 MW (summer 

rating), located in Ontelaunee, Pennsylvania. Applicants state that the Ontelaunee 

Energy Center is interconnected with the transmission grid controlled by PJM. The 

Commission has authorized Ontelaunee to sell energy, capacity, and certain ancillary 

services at market-based rates. Applicants state that Ontelaunee also has a rate schedule 

on file with the Commission for cost-based reactive power compensation. 

l. Sithe!Independence Power Partners, L.P. 

25. Applicants state that Sithe/Independence Power Partners, L.P. 

(Sithe/Independence) is an indirect, wholly-owned subsidiary ofDynegy. Applicants 

state that it is an exempt wholesale generator that owns and operates the Sithe 

Independence Station, a natural gas-fired electric generating facility with a net capacity 

of 982 MW (summer rating), located in Oswego, New York. Applicants state that the 

Sithe Independence Station is interconnected to the transmission system controlleJ by 

NYISO. The Commission has authorized Sithe!Independence to sell energy, capacity, 

and certain ancillary services at market-based rates. 

8 Application at 13 (citing Llynegy Roseton, L.L.C., 142 FERC '1[62, 148 (2013)). 
Electronic Filino- Recived. Clerk's Office: 10/17/2013 

20131011-3039 FERC PDF (Unofficial) ~o/il!2013 

Docket No. ECI3-93-000 - 9-

m. Nevada Cogeneration Associates #2 

26. Applicants state that Nevada Cogeneration Associates #2 (Nevada Cogen) is 

indirectly owned 50 percent by Dynegy and 50 percent by Chevron Corporation. 

Applicants state that it owns and operates the Black Mountain Facility, a natural gas-fired 

qualifying cogeneration facility with a capacity of 85 MW (summer rating), located near 

Las Vegas, Nevada, that is interconnected with the transmission system of the Nevada 

Power Company. Applicants state that by virtue of the qualifying facility status of the 

Black Mountain Facility, Nevada Cog en does not make FPA-jurisdictional sales and 

therefore does not have a rate schedule on file with the Commission. 

B. Description ofthe Proposed Transaction 

27. The Proposed Transaction will occur pursuant to the Transaction Agreement 

Between Ameren Corporation and Illinois Power Holdings, LLC dated March 14,2013 

(Transaction Agreement). Illinois Power Holdings is an indirectly owned, special 

purpose vehicle that Dynegy has formed for purposes of accomplishing the Proposed 

Transaction. The generating assets subject to the Proposed Transaction include the 

Duck Creek (410 MW), Coffeen (895 MW), E.D. Edwards (650 MW), and Newton 

(1,197 MW) coal-fired stations, all located in the MISO footprint, and Ameren's indirect 

80 percent interest in the Joppa generating station (1,167 MW) and the Midwest Power 

gas turbines (74 MW), located in the Electric Energy balancing authority area. The 

jurisdictional facilities involved in the Proposed Transaction also include: (I) marketbased rate tariffs or schedules; (2) contracts entered into under such tariffs or schedules; 

(3) reactive power rate schedules, an OATT and a cost-based rate schedule; (4) associated 

books and records; and (5) transmission interconnection facilities. 

28. Applicants state that the Proposed Transaction will be accomplished in a series of 

steps. ln the frrst step, which will occur following Commission approval of the Proposed 

Transaction but before closing, Ameren Energy Generating will transfer the Grand Tower 

Energy Center, the Gibson City Energy Center, and Elgin Energy Center to Medina 

Valley. Applicants explain that this step will be taken because these three plants are not 

being sold to Dynegy. Instead, consistent with its decision announced in December 2012 

to exit the merchant generation business, Ameren states that it intends to sell these gasfired units to a non-affiliated third party.9 Ameren Energy Generating will also transfer 

to Medina Valley two mothballed generating facilities, the Hutsonville Plant and the 

Meredosia Plant, together with certain associated liabilities. Ameren Resources will 

cause, through contributions or mergers, all of its remaining assets and liabilities, 

9 Applicants state that Ameren has commenced a sale process for these three units 

and that any transfer of the three units would be the subject of a separate application 

under section 203. Application at n.43. 
Electronic Filino- Recived, Clerk's Office: 10/17/2013 

201Jl011-3038 FERC PDF (Unofficial) IO/ll/2013 

Docket No. EC13-93-000 - 10-

including its interests in the Ameren Merchant Utilities, to be held directly or indirectly 

by a newly-formed subsidiary (New Ameren Resources), except for: (i) any debt owed to 

the seller group (that is, debt owed to Ameren and its subsidiaries other than Ameren 

Resources (or New Ameren Resources) and its subsidiaries); and (ii) certain contracts 

relating to the development of advanced coal generation technology. In the second 

step of the Proposed Transaction, Ameren will cause Ameren Resources to transfer 

100 percent of its equity interests in New Ameren Resources to Illinois Power Holdings, 

with the result that Dynegy will indirectly acquire all of Ameren's interests in the 

Ameren Merchant Utilities, including the operating generating facilities that they hold at 

closing. Also at closing, Ameren and Illinois Power Holdings will enter into a 

transitional services agreement, under which Ameren and its subsidiaries will provide to 

New Ameren Resources and the Ameren Merchant Utilities certain administrative 

services they received prior to closing for a term of six months (subject to one six-month 

extension). 

29. Applicants explain that Ameren will receive no cash proceeds as a result of the 

divestiture of New Ameren Resources. However, Applicants state that Ameren will 

receive benefits from the Proposed Transaction, including the removal of Ameren Energy 

Generating's debt from Ameren's consolidated balance sheet, as well as certain tax 

benefits that will accrue to Ameren. In addition, at the closing of the Proposed 

Transaction, Ameren Energy Generating and Ameren Resources Generating will enter 

into amendments to the agreements by which they acquired their generating facilities 

from predecessors of Ameren Illinois.10 Applicanl<> explain that, through these 

amendments, Ameren Energy Generating and Ameren Resources Generating will assume 

certain environmental liabilities currently held by Ameren Illinois relating to ownership 

and operation of the generating facilities prior to ownership by Arrieren Energy 

Generating and Amcrcn Resources Generating. Thus, as Dynegy will indirectly acquire 

Ameren Energy Generating and Ameren Resources Generating upon consummation of 

the Proposed Transaction, the assumed environmental liabilities will be transferred out of 

the Ameren corporate family. Applicants demonstrate that following the closing of the 

Proposed Transaction, Dynegy will obtain a total of approximately 4,393 MW of 

additional capacity, to bring their company-wide total capacity to 13,868 MW, while 

Ameren will retain approximately 11,578 MW of generation capacity, which is reduced 

from 15,971 MWY · 

10 Ameren Illinois was formed by the merger of Central Illinois Light Company 

and Illinois Power Company into Central Illinois Public Service Company, which then 

changed its name to Ameren Illinois. See Ameren Corp., 131 FERC ~ 61,240 (2010). 

11 Application at 21. 
Electronic Filinn - Recived. Clerk's Office: ID/17 /2013 

20131011-3038 FERC PDF (Unofficial} ~0/11/2013 

Docket No. EC13-93-000 - 11 -

11 Notice of Filing and Responsive Pleadings 

30. Notice of the Application was published in the Federal Register, 78 Fed. 

Reg. 25,072 (2013), with interventions and comments due on or before June 17, 2013. 

Notice of the May 9, 2013 supplement to the Application was published in the Federal 

Register, 78 Fed. Reg. 29,128 (2013), with interventions and comments due on or before 

June 17,2013. 

31. The Illinois Commission filed a notice of intervention. Local Union Nos. 51 and 

702, International Brotherhood of Electrical Workers, AFL-CIO ftled a timely motion to 

intervene. The Illinois Municipal Electric Agency (Illinois Municipal), Southwestern 

Electric Cooperative, Inc. (Southwestern Electric), and the Missouri Joint Municipal 

Electric Utility Commission (Missouri Joint Municipal) filed timely motions to intervene 

and protest. 

32. On July 2, 2013, Applicants ftled an answer to the protests. 12 On July 3, 2013, 

Illinois Municipal filed an answer to Applicants Answer to Protests. 13 On July 12, 2013, 

Missouri Joint Municipal filed an answer to Applicants Answer to Protests. 14 

33. On July 26, 2013, the Director of the Division of Electric Power Regulation- West 

issued a request for additional information from Applicants. 15 Applicants filed a 

response to the request on August 5, 2013. 16 Notice of Applicants Response to 

Information Request was published in the Federal Register, 78 Fed. Reg. 49,493 (20 13), 

with interventions and comments due on or before August 19, 2013. Sierra Club filed a 

timely motion to intervene and protest to Applicant~ Answer (Sierra Club Protest). 

Illinois Municipal and Missouri Joint Municipal (together, Municipal Protesters) filed 

12 Request for Leave to Answer and Answer of Ameren Generating Company, et 

al., Docket No. EC13-93-000 (Applicants Answer). 

13 Answer of Illinois Municipal to Applicants motion for leave to file answer and 

conditional motion for leave to file answer to an answer, Docket No. EC13-93-000 

(Illinois Municipal Answer). 

14 Answer of Missouri Joint Municipal to Applicants motion for leave to file 

answer and conditional motion for leave to file answer to an answer, Docket No. EC13-

93-000 (Missouri Joint Municipal Answer). 

15 Letter order directing Applicants to provide additional information, Docket 

No. ECB-93-000. 

16 Response to July 26,2013 letter, Docket No. EC13-93-000 (Applicants 

Response to Information Request). 
Electronic Filino- Recived. Clerk's Office: 10/17/2013 

20131011-3038 FERC FDF (Unofficial) "J.0/1112013 

Docket No. EC13-93-000 - 12 -

comments in response to Applicants' Response to Information Request. 17 On 

September 3, 2013, the Ameren Merchant Utilities filed a supplemental answer.

18 On 

September 12, 2013, Illinois Municipal filed an answer to the Ameren Merchant Utilities' 

supplemental answer.

19 

lll. Discussion 

A. Procedural Issues 

34. Pursuant to Rule 214 of the Commission's Rules of Practice and Procedure, 

18 C.F.R. § 385.214 (2013), the notice of intervention, and timely unopposed motions to 

intervene serve to make the entities that filed them parties to this proceeding. 

35. Rule 213(a)(2) of the Commission's Rules of Practice and Procedure, 18 C.F.R. 

§ 385.213(a)(2) (2013), prohibits an answer to a protest or an answer unless otherwise 

ordered by the decisional authority. We will accept the answers that have been filed 

because they have provided information that assisted us in our decision-making process. 

B. Standard of Review Under Section 203 

36. Section 203(a)(4) of the FPA requires the Commission to approve a transaction if 

it determines that the transaction will be consistent with the public interest. The 

Commission's analysis of whether a transaction will be consistent with the public interest 

generally involves consideration of three factors: (I) the effect on competition; (2) the 

effect on rates; and (3) the effect on regulation.10 Section 203(a)(4) also requires the 

Commission to find that the transaction "will not result in cross-subsidization of a nonutility associate company or the pledge or encumbrance of utility assets for the benefit of 

an associate company, unless the Commission determines that the cross-subsidization, 

17 Respectively, Comment of Illinois Municipal to Applicants response to the 

Commission's request for more information (Illinois Municipal Response to Applicants 

Response) and Response of Missouri Joint Municipal to Applicants August 5, 2013 

compliance filing (Missouri Joint Municipal Response to Applicants Response). 

18 The Ameren Merchant Utilities Supplemental Answer notified the Commission 

of a lawsuit filed in the United States District Court in the Central District oflllinois 

regarding a contract between Illinois Municipal and Ameren Marketing. 

19 In its Answer to Supplemental Answer, Illinois Municipal informed the 

Commission that the relief requested in the lawsuit was different than the relief requested 

in its protest filed in this proceeding. 

20 Merger Policy Statement, FERC Stats. & Regs.~ 31,044 at 30,111. 
Electronic Filing- Recived. Clerk's Office: 10/17/2013 

20131011-3038 FERC PDF :u~oiti~ial) ~0/11/2013 

Docket No. EC 13-93-000 - 13-

pledge, or encumbrance will be consistent with the public imerest.'' 21 The Commission's 

regulations establish verification and informational requirements for applicants that seek 

a detem1ination that a transaction will not result in inappropriate cross-subsidization or 

pledge or encumbrance of utility a<>scts. 22 

C. Analy~is Under Section 203 

1. Effect on Horizontal Competition 

a. Applicants' Analysis 

37. Applicants state that the Proposed Transaction will not have an adverse effect on 

competition. Applicants identify the MISO, Electric Energy/TVA and PJM markets as 

the relevant geographic markets in which Applicants already own or control generation 

capacity. However, Applicants detennine that the only significant change in generation 

ownership resulting from the Proposed Transaction will be in the M!SO geographic 

market. 23 Applicant.<> identify the following products as relevant to the Proposed 

Transaction and analyze them \Vi thin the MISO geographic market: electric energy, 

electric capacity, and ancillary services.'• 

38. Applicants submit a forward-looking, competitive analysis screen using the 

delivered price test framework for the MISO market assuming that the current MISO 

footprint exists as well as a scenario that assumes the inclusion of the transmission 

systems of certain public utilities operating in the southern region into MIS025 expected 

to occur in December of2013 (M!SO Southern Region). 16 Additionally, Applicants 

21 16 U.S.C. § 824b(a)(4) (2006). 

22 18 C.F.R. § 33.20) (2013). 

23 Application at 21. 

2

• Jd. at 23. 

25 See MJSO Southern Region Integration, 

https://www.midwestiso.org/What\VeDo/Strategiclnitiatives/SouthernRef!ionlntegrationl 

Pages/SouthemRegionlntegration.aspx (MISO approved the integration of the 

transmission systems ofEntergy Corporation's public utility subsidiaries, South 

Mississippi Elcctt·ic Power Association, Cleco Power, LLC, and Lafayette City-Parish 

Consolidated Government). 

26 Application at 22. 
Electronic Filino- Recived, Clerk's Office: 10/17/2013 

20131011-3038 FERC PDF (Unofficial) 'i'0/11/2013 

Docket No. ECIJ-93-000 - 14-

analyze a combined Electric Energy/TV A market.27 Applicants submit an Appendix A 

analysis as required under section 33.3(a)(2) of the Commission's regulations?8

• 

Applicants performed both an economic capacity (EC) and available economic capacity 

(AEC) analysis.29 

39. In connection with their competitive analysis, Applicants were directed by 

Commission staff to submit a revised simultaneous transmission import limit (SIL) study 

for the MISO market for 2014 to monitor all the 100 kV and above transmission elements 

in the first-tier areas, and were directed to rerun the results of their Appendix A analysis 

with the revised SIL. 30 

27 While Applicants' base case models the output of the Joppa Facility in MISO, 

Application at 21-22, in accepting Electric Energy's market-based rate tariff, the 

Commission made no fmding with respect to Electric Energy's claim that MISO is the 

proper relevant geographic market for the Joppa Facility. See Electric Energy Inc., 

113 PERC~ 61,245, at P 15 (2005). 

28 Applicants performed an Appendix A analysis, also referred to as a Delivered 

Price Test or Competitive Analysis Screen, to determine the pre- and post-transaction 

market shares from which the market concentration or Herfindahl-Hirschman Index 

(HHI) change can be derived. The HHI is a widely accepted measure of market 

concentration, calculated by squaring the market share of each firm competing in the 

market and summing the results. The HHI increases both as the number of firms in the 

market decreases and as the disparity in size between those firms increases. Markets in 

which the HHI is less than l ,000 points are considered to be unconcentrated; markets in 

which the HHI is greater than or equal to 1,000 but less than 1,800 points are considered 

to be moderately concentrated; and markets in which the HHI is greater than or equal to 

1,800 points are considered to be highly concentrated. In a horizontal merger, an 

increase of more than 50 HHI points in a highly concentrated market or an increase of 

I 00 HI-II points in a moderately concentrated market fails its screen and warrants further 

review. Merger Policy Statement, PERC Stats. & Regs.~ 31,044 at 30,129; see also 

Analysis of Horizontal Market Power under the Federal Power Act, 138 FERC ~ 61,!09 

(2012) (affirming the Commission's use of the thresholds adopted in the Merger Policy 

Statement). 

29 Each supplier's EC is the amount of capacity that could compete in the relevant 

market given market prices,. running costs, and transmission availability. AEC is based 

on the same factors but subtracts the supplier's native load obligation from its capacity 

and adjusts transmission availability accordingly. 

30 Information Request at 2. 
Electronic Filina- Recived, Clerk's Office: 10/1712013 

20131011-3038 FERC PDF (Unofficial) ~o/il/2013 

Docket No. EC13-93-000 - 15 -

40. Applicants' revised competitive analysis shows no violations of the Commission's 

market power screens in the MISO geographic market for any load/season under various 

assumptions. The table below shows no screen failures for EC, defining the geographic 

market as the current MISO footprint under Applicants' base case assumptions. 

EC Results in Current MISO Footprint (revised SILl Table 1 

I Dynegy Ameren 

Market Market HHI 

Period MW Share MW Share HHI Change 

Summer Super Peak 1 6,855 5.3% 9,973 7.8% 393 (361 

Summer Super Peak 2 6,855 5.4% 9,973 7.6% 379 (36) 

Summer Peak 6,647 6.0% 7,563 6.8% 376 (30) 

Summer Off-Peak 6,183 6.5% 6,105 6.4% 351 (33) 

Winter Super Peak 6,240 5.5% 8,509 7.5% 378 (33) 

Winter Peak 16,245 6.1% 6,891 6.7% 361 (29) 

Winter Off-Peak 4,053 5.0% 5,745 7.1% 342 (26) 

Shoulder Super Peak 5,715 5.1% 8,642 7.8% 3761 (35) 

Shoulder Peak 5,602 6.0% 5,876 6.4% 341 (27) 

Shoulder Off-Peak 1,663 2.3% 4,977 6.8% 342 (11) 

Source: Applicants' Response to Information Request at Exh. JRS-6. 

41. Applicants note that the result of the Proposed Transaction is a reduction in EC 

market concentration as measured by HHI because affiliates of the Ameren Merchant 

Utilities are affiliated with more generation in MISO than the Dynegy affiliates, which is 

why the HHI changes shown in Table I are negative.31 For the EC measure, Applicants 

performed the following sensitivity analyses: including the MISO Southern Region as 

part of the relevant geographic market; adjusting for price (both higher and lower 

by I 0 percent); and assuming the retirement of certain coal generation in the market 

( 4,127 MW), none of which results in screen failllTes or results that differ from the base 

results presented above.32 

31 Application at 26-27. 

32 I d. at 27. 
Electronic Filinn- Recived, Clerk's Office: 10/1712013 

20131011-3038 FERC PD? (Unofficial) ~0/11/2013 

Docket No. ECI3-93-000 - 16-

42. Applicants' revised competitive analysis, presented in the table below, shows no 

screen failures for AEC, defining the geographic market as the current MISO footprint 

under their base case assumptions. 

AEC Results for Current MISO Footprint System-Wide Dispatch (revised SIL) Table 2 

Dynegy Ameren 

Market Market HHI 

Period MW Share MW Share HHI Change 

Summer Super Peak 1 6,927 25.4% 2,407 8.8% 906 48 

Summer Super Peak 2 6,901 16.0% 3,417 7.9% 637 (26) 

Summer Peak 6,7021 15.2% 1,685 3.8% 634 45 

Summer Off-Peak ' 6,253 15.5% 467 1.2% 517 91 

Winter Super Peak 6,317 12.3% 2,613 5.1% 519 2 

Winter Peak 6,330 13.8% 1,275 2.8% 530 49 

Winter Off-Peak 4,053 1 13.3% 444 1.5% 482 68 

Shoulder Super Peak 5,771 I 11.8% 3,358 6.9% 464 (28) 

Shoulder Peak 5,638 14.5% 1,109 2.9% 540 56 

Shoulder Off-Peak 1,732 6.3% 297 1.1% 426 14 

Source: Applicants'· Response to lnformatwn Request at Exh. JRS-7. 

43. Applicants explain that to derive AEC, they first assigned the lowest cost 

generation in MISO to serve the load located in MISO, with the residual generation 

available for sale in the market. Applicants further state that they derived an alternate 

measure of AEC by assigning load serving utilities' lowest cost capacity resources to 

serve their respective load obligations and the residual capacity is available for sale in the 

market. As with the EC analysis, Applicants performed the following sensitivity 

analyses: including the MISO Southern Region as part of the relevant geographic market; 

adjusting for price (both higher and lower by 10 percent); and assuming the retirement of 

certain coal generation in the market (4,127 MW), none of which results in screen 

·failures or results that differ from the base results presented above. 33 

44. Applicants further explain that the characteristics of the generation involved in the 

Proposed Transaction indicate the absence of competitive concerns. Applicants state that 

the only generation Dynegy currently owns in MISO and the majority of the generation 

being transferred to Dynegy in the Proposed Transaction is base load, coal-fired 

generation. Applicants contend that the generation assets that Dynegy is acquiring would 

be unlikely to allow Dynegy to exercise a profitable withholding strategy. 

33 Id. at 29. 
Electronic Filino - Recived, Clerk's Office: 10/17/2013 

20131011-3038 PERC PDF (Unofficial) 10/11/2013 

Docket No. EC13-93-000 - 17-

45. Applicants state that, in the MISO long-term, forward capacity market, based on 

the results of the auction for the June 2013 to the May 2014 planning year, lhe Proposed 

Transaction will result in Dynegy's share of the capacity market rising from 

approximately one percent to slightly less than four percent.34 

46. Applicants also studied the ancillary services markets in MISO for regulation and 

contingency reserves. 

35 Applicants conclude that the Proposed Transaction will have a 

deconcentrating effect on the regulation and the contingency reserves markets because 

the generation associated with Ameren has more capability to provide those products than 

does that ofDynegy.36 

b. Protests and Comments 

47. Illinois Municipal challenges Applicants' claim that there are no relevant 

submarkets to consider in MlSO. Illinois Municipal asserts that there is evidence, noted 

by Applicants' study, that there is transmission congestion in Southern Illinois and that 

Applicants should be required to demonstrate that there will be no ability post transaction 

to drive up locational marginal prices through selective withholding at Illinois 

flowgates.37 

48. Missouri Joint Municipal claims that Applicants have significantly understated the 

scope of the environmental compliance issue and asks the Commission to consider the 

effect of an estimated 12,000 MW of coal-fired plant retirements and 50,000 MW of coal 

retrofits.38 Missouri Joint Municipal slates that the Proposed Transaction will eliminate a 

supply choice for purchasers in the MISO market and poses a danger of real competitive 

harm. Missouri Joint Municipal requests that the Commission direct Applicants to 

submit a revised sensitivity analysis to address a greater number of projected coal 

retirements and retrofits that are projected in a March 2013 MlSO owner survey of plant 

retrofits and retirements.39 

34 d /,.at30. 

35 Contingency reserves are the sum of spinning reserves and supplemental 

reserves. 

36 Application at 31. 

37 Illinois Municipal Protest at 25. 

38 Missouri Joint Municipal Protest at 13-14. 

39 !d. at n.13. 
Electronic Filina- Recived, Clerk's Office: 10/1712013 

20l31011-3038 FERC PDF (Unofficial) '10/11/2013 

Docket No. EC13-93-000 - 18-

49. Southwestern Electric states that Applicants did not perform a proper analysis of 

the ancillary services market because they did not account for the localized nature of 

regulating reserves, spinning reserves, and supplemental reserves products. 40 

Specifically, Southwestern Electric states that voltage regulation and spinning reserves 

have to be purchased from local generation within a specified reserve zone.

41 

Southwestern Electric disagrees with Applicants' assertion that the decrease in Hill 

attributable to Ameren more than offsets the increase in Hill from the Proposed 

Transaction attributable to Dynegy. Southwestern Electric requests that the Commission 

require Applicants to provide this information.42 

50. Sierra Club asks that the Commission require Applicants to submit a market power 

analysis focusing on the effect of the Proposed Transaction on local markets served by 

the generators at issue and accounting for a more realistic estimate of coal plant 

retirements in the region, inquire ofDynegy whether there are any plans to acquire 

additional generation capacity beyond that involved in the Proposed Transaction, and 

condition authorization on a commitment by Dynegy not to acquire additional generation 

capacity in Illinois. 43 Sierra Club posits that local congestion in central and southern 

Illinois indicates the need for Applicants to study local markets and points to several 

flowgates within MISO that have experienced congestion.44 Sierra Club also states that 

Applicants' sensitivity analysis for coal retirements is much smaller than what is likely to 

occur, reiterating Missouri Joint Municipal's claim and source. 45 The Sierra Club also 

asserts that Applicants failed to properly consider the market for ancillary services. 46 

· c. Applicants Answer 

51. Applicants respond to the Illinois Municipal's concern regarding a possible 

submarket in MISO by noting that no evidence was presented to counter Applicants' 

40 Southwestern Electric Protest at 10-11. 

41 !d. at 12. 

42 !d. at 10. 

43 . Sierra Club Protest at 7. 

44 !d. at 3-4. 

45 !d. at 4. 

46 !d. at 5. 
Electronic Filinn" Recived. Clerk's Office: 10/1712013 

20131011-3038 FERC PDF (Unofficial) ~0/11/2013 

Docket No. EC13-93-000 - I 9 -

analysis of price and congestion data in MISO, which concluded that there are no 

relevant submarkets. 47 

52. Applicants respond to Missouri Joint Municipal's concern regarding an 

underestimation of coal-fired power plant retirements by stating that there is a substantial 

degree of uncertainty and variability in published forecasts of near-term coal plant 

retirements in MTSO. Applicants state that the amount of planned retirements ranged 

from 4,000 to 6,000 MW as reported in the March 2013 MTSO owner survey cited by 

Missouri Joint Municipal. Applicants state that the assumption of 4,000-5,000 MW of 

retirements assumed in Applicants' analysis is within a reasonable range for a sensitivity 

l . 48 ana ys1s. 

53. Applicants respond to Southwestern Electric's claim that Applicants have failed to 

consider local markets for procuring ancillary services. 49 Applicants state that MTSO 

established reserve zones within the MJSO balancing authority area to ensure that 

regulation and contingency reserves are provided in a manner that precludes adverse 

operating conditions affecting the reliability of the transmission system. Applicants 

explain there are currently six reserve zones in MISO. 50 Applicants state that all of 

Dynegy's current generating capacity in MISO is located in reserve zone one and that the 

Ameren Merchant Utilities own generating capacity in both reserve zone one and reserve 

zone two.51 Applicants state that the Proposed Transaction reduces the share of total 

generation (as well as spinning reserves and regulation) that Ameren will retain in both 

reserve zone one and reserve zone two and does not increase market concentration 

because Ameren currently has a higher market share than Dynegy.52 

d. Commission Determination 

54. We fmd that the Proposed Transaction will not create horizontal market power 

concerns. We fmd that the changes in HHI that will result from the Proposed Transaction 

in the MISO footprint show that the thresholds established in the Commission's 

competitive analysis screen under the EC and AEC measures are not exceeded for any 

47 Applicants Answer at 4-5, 

48 !d. at 8. 

49 !d. at 12. 

50 !d. 

51 !d. at 13. 

52 !d. at 15. 
Electronic Fil\'nn - Recived. Clerk's Office: 10/17/2013 201}1011-3038 FERC PDF TUnofficial ~0/11/2013 

Docket No. EC13-93-000 -20-

season/load period, even when tested using various sensitivities. We note that the MISO 

market remains unconcentrated under each scenario and sensitivity submitted by 

Applicants. We also find the Proposed Transaction does not result in an adverse effect on 

competition in the MISO regulation and contingency reserve markets for ancillary 

services. 

55. We fmd that for energy and capacity products, the appropriate geographic market 

to analyze is the MISO balancing authority area. Applicants appropriately presented data 

that shows no additional submarkets need to be considered, and intervenors have not 

provided evidence to show that there are binding transmission constraints during 

historical peaks and other competitively significant tinles that would prevent competing 

supply from customers within the proposed alternative geographic market of southern or 

central Illinois. 5

3 While Sierra Club notes the existence offlowgates that have 

experienced historical congestion, there is no mention of the direction of the congestion 

that would indicate limits of available supply in southern or central Illinois. 

56. Applicants' Delivered Price Test, as revised, was performed in accordance with 

Commission policy.54 In the MISO energy market as a whole, we find that Applicants 

pass the Commission's screens for market concentration under all season/load levels 

under both EC and AEC measures. 5

5 Additionally Applicants pass the Commission's 

screens when sensitivity analyses assuming a I 0 percent increase in price and a 

10 percent decrease in price are studied. Applicants also pass the screens under various 

possible future market conditions, including: an expanded Southern MISO market; using 

an alternative dispatch methodology to AEC; and assuming the retirement of 4,217 MW 

of coal-fired generation. Therefore, we find that in the MISO energy market the 

Proposed Transaction does not create an adverse effect on competition, 

57. We disagree with the Southwestern Electric's and Sierra Club's assertions that 

Applicants have not studied coal retirement scenarios sufficiently. The Commission has 

stated that merger analysis should be as forward-looking as practicable. 56 Applicants' 

consideration of 4,127 MW of coal-fired retirements in their sensitivity analysis is a 

53 See NRG Energy, Inc., 141 FERC ~ 61,207, at P 75 (2012). 

54 See, e.g., Merger Policy Statement at Appendix A. See also Order No. 642, 

FERC Stats. & Regs. ~ 31, Ill; AEP Power Marketing, Inc., 107 FERC ~ 61,018, at 

App. E (2004). 

55 Both EC and AEC measures are relevant and useful because MISO market 

participants are in both restructured markets and markets where traditional public utilities 

retain their load serving obligations. 

56 Order No. 642, FERC Stats. & Regs.~ 31,111 at P 38. 
Electronic Filinn- Recived. Clerk's Office: 10/1712013 

20131011-3038 FERC PDF (Unofficial)~o/i1T2013 

Docket No. EC13-93-000 - 21 -

reasonable figure given the uncertainty surrounding retirement decisions. Applicants 

note that the March 2013 MISO owner survey results have ranged frorri 4,000 to 

6,000 MW of planned retirements over the prior 12 month period and that an internal 

MISO analysis in that document forecasts as much as 8,000 MW of net retirements over 

the 2013-2016 time frame. 5

7 Applicants also explain that the 38,000 MW of retrofit 

outages would be scheduled by MISO in the spring and fall season and average 

approximately 4,000 MW.58 Given the wide range of estimates of retirements put forth in 

the record, the uncertain time frame over which those retirements will occur, and that 

those retirements are not directly impacted by the transaction, we find Applicants' 

estimate of retirements for sensitivity analysis purposes to be reasonable. While the 

overall future concentration levels of the market are relevant to the Commission's 

analysis, we note that future retirements of coal-fired generation are independent ofthe 

Proposed Transaction. Since all of the capacity that Applicants are disposing of is coalfired, had Applicants considered alternate scenarios with more coal retirements, the 

Proposed Transaction would continue to be deconcentrating, as measured by I·llil, under 

most season/load conditions because Ameren's current larger market presence of 

approximately 14,270 MW of capacity would be reduced to approximately 11,118 MW, 

but not eliminated, such that each of Dynegy and Ameren will hold less market share 

than Ameren currently holds prior to the close of the Proposed Transaction. 

58. While the Proposed Transaction does not trigger screen failures, the Commission 

has previously made clear that it will consider other evidence of anti competitive effects 

beyond HHI. 59 Here we find no evidence of anticompetitive effects that may be masked 

in the market concentration measures, and intervenors have not provided alternative 

evidence for the Commission to consider. As Applicants not~, the Proposed Transaction 

consists almost entirely of baseload capacity. The Commission has previously stated that 

it is difficult from an operational perspective to withhold baseload generation because of 

the expense involved in doing so and because of the length of time it typically takes to 

ramp up and ramp down such generation. 60 This provides additional assurance that the 

Proposed Transaction will not have an adverse effect on competition. 

57 Applicants Answer at 7-8. 

58 Applicants Answer at 9. 

59 Analysis of Horizontal Market Power under the Federal Power Act, 138 FERC 

-,r 61,109 at P 36. 

60 Arizona Public Service Co., 141 FERC -,r 61,154, atP 33 (2012); First Energy 

Corp. 133 FERC -,r 61,222, at P 50 (2010). 
Docket No. EC13-93-000 -22-

59. In the market for ancillary services, both spinning reserves and regulation, 

Applicants have demonstrated that there is no overlap of sales capabilities in MISO's 

reserve zone two. Applicants also have demonstrated that where there is overlap in 

MISO's reserve zone one, the market concentration, as measured by HHI, will decrease 

because Ameren' s current larger market share will be reduced by the Proposed 

Transaction. After the Proposed Transaction closes, Dynegy will continue to have less 

capability than Ameren to provide ancillary services. Therefore, because the Proposed 

Transaction will not increase concentration in the market for ancillary services in the 

MISO market, we conclude that it will not have an adverse effect on competition. 

2. Effect on Vertical Competition 

a. Applicants' Analvsis 

60. Applicants state that the Proposed Transaction does not present any vertical 

inarket power concerns. Specifically, Applicants state that Dynegy does not own or 

control any electric transmission facilities, other than generator interconnection facilities 

within the relevant geographic market. Other than localized interconnection facilities, 

Electric Energy's limited transmission facilities are the only transmission facilities being 

acquired through the Proposed Transaction. All transmission service over the Electric 

Energy facilities is provided under a Commission-approved OATT. Applicants state that · 

under Commission precedent, service under a Commission-approved OATT mitigates 

any vertical market power concerns related to Dynegy's acquisition of those facilities. 

61. Applicants further state that Dynegy does not own any natural gas pipeline or 

distribution assets used to serve unaffiliated competing generation facilities within the 

relevant geographic market, and it is not acquiring such facilities through the Proposed 

Transaction. As a result, Applicants state that Dynegy will not obtain any ability from 

the Proposed Transaction to leverage control over such assets to benefit its electric 

generation facilities. 

62. Applicants also state that Dynegy does not currently possess any market power 

with respect to any other inputs to the generation of electricity. Through its acquisition of 

interests in the Ameren Merchant Utilities, Dynegy will acquire certain sites for 

generation capacity development, undeveloped coal and mineral rights at the Newton and 

Coffeen generating facilities, and owned and leased rail cars used to deliver coal to the 

Newton, Coffeen, and other generating facilities. Dynegy will also acquire: (i) the Joppa 

and Eastem Railroad Company, a subsidiary of Electric Energy that owns a 3.9-mile rail 

line and operates and controls associated rail cars that transport coal to the Joppa Facility; 

and (ii) the Coffeen and Western Railroad Company, a subsidiary of Ameren Energy 

Generating, which owns a 0.48 mile rail line and operates and controls associated rail 

cars that transport coal to the Coffeen facility. Applicants maintain that Dynegy could 

not use such assets and facilities to create barriers to entry to rival electricity producers. 
Electronic Filino- Recived, Clerk's Office: 10/17/2013 

20l31011-3038 FERC PDF (Unofficial) ~0/11/2013 

Docket No. EC13-93-000 - 23-

b. Commission Determination 

63. We find that the Proposed Transaction does not raise any vertical market power 

concerns since Dynegy does not own and will not in the Proposed Transaction acquire 

any transmission facilities, other than localized interconnection facilities, does not own 

and will not be acquiring any upstream natural gas assets used to serve unaffiliated 

generators, and does not currently possess any market power with respect to any other 

inputs to generation. Additionally, transmission service over the Electric Energy 

facilities is provided under a Commission-approved OATT. We note that no party has 

argued that the Proposed Transaction raises vertical market power concerns. 

3. Effect on Rates 

a. Applicants' Analysis 

64. Applicants state that the Proposed Transaction will have no adverse impact on 

jurisdictional rates. They state that none of the Applicants currently provides third-party 

. transmission service or has any captive wholesale requirements customers. Applicants 

state that Ameren Energy Generating and Ameren Resources Generating have plant 

specitlc, cost-based reactive power rate schedules on file. In addition, Midwest Power 

sells the output of its assets under a long-term, cost-based contract to Electric Energy. 

Ameren Energy Generating and Ameren Resources Generating's reactive power rate 

schedules are fixed-rate contracts that, according to Applicants, do not contain 

mechanisms that would allow for the pass-through of any costs of the Proposed 

Transaction without a separate filing under FP A section 205. Applicants state that 

following closing of the Proposed Transaction, Ameren Energy Generating will cancel its 

reactive power rates with respect to the plants transferred to Medina Valley, and Medina 

Valley will make a corresponding section 205 filing to adopt those same rates. 

Applicants maintain that the Midwest Power cost-based contract should not be of concern 

because Electric Energy, Midwest Power's parent company, is the buyer under the 

contract, and Electric Energy sells power under market-based rate authority.61 With 

these exceptions, all of the A.meren Merchant Utilities' wholesale sales of electric energy, 

capacity, and ancillary services are, and will continue to be, at market-based rates. 

Applicants state that Dynegy's existing public utility subsidiaries are not involved in the 

Proposed Transaction, and their rates will be unaffected by it. 62 

61 Application at 35 n.95. 

62 J,d 3 . at 5. 
Eh:u:tronic Filino - Recived. Clerk's Office: 10/1712013 

20131011-3038 FERC PDF (Unofficial) "l.0/11/2013 

Docket No. ECI3-93-000 -24-

65. While Applicants maintain that the Proposed Transaction will not have an adverse 

effect on jurisdictional rates, they nevertheless offer a rate freeze commitment with 

respect to the Electric Energy OA IT and the reactive power rates for the Ameren Energy 

Generating and Ameren Resources Generating generation units, including those to be 

transferred to Medina Valley. Applicants explain that the rates subject to this rate freeze 

are all cost-based, stated rates that can only be changed via filings made under sections 

205 and 206 of the FPA. Applicants commit for a period of five years following the 

closing of the Pr~posed Transaction not to seek any rate increase with respect to these 

cost-based rates. 

66. Applicants note that Ameren Marketing has long-term, wholesale sales contracts 

for the supply of capacity and energy to Missouri Joint Municipal and Illinois Municipal 

(the Municipal Contracts). Applicants state that, while sales under these contracts are 

made at negotiated rates, the rates are based on formulas that incorporate the costs of the 

Ameren Energy Generating and Ameren Resources Generating facilities used to supply 

power under the contracts. Applicants state that Ameren Marketing is currently engaged 

in disputes with Illinois Municipal under one of the Municipal Contracts relating to 

various matters, including the effect of transferring generating assets on the calculation of 

rates under the contract formula. Applicants state that while Ameren Marketing (and 

Dynegy to the extent the disputes continue past the closing of the Proposed Transaction) 

hope to resolve these disputes amicably in accordance with the provisions of the contract, 

the disputes are not relevant to the consideration of the Proposed Transaction's effect on 

jurisdictional rates because both of the Municipal Contracts were entered into under 

Ameren Marketing's market-based rate authority. 64 

b. Protests and Comments 

67. Illinois Municipal maintains that the Proposed Transaction will adversely affect its 

wholesale rates. It explains that it is responsible for meeting the full load-serving 

requirements of its municipal electric system members; which it does through a longterm, wholesale power purchase contract with Ameren Marketing. Illinois Municipal 

states that this is a cost-based contract based on the costs of the Ameren Energy 

Generating and Ameren Resources Generating generation facilities that supply the power 

delivered under the contract. Illinois Municipal maintains that the asset values of these 

generating facilities are significantly overstated on the 2012 FERC Form No. 1 of 

Ameren Energy Generating and on the books maintained by Ameren Resources 

Generating. It states that in December 2012, Ameren recorded an impairment of 

approximately $2 billion of generating assets owned by Ameren Energy Generating and 

63 Id. at 36. 

64 !d. at 36-37. 
Eli::ctronic Filino- Recived, Clerk's Office: 10/1712013 

20131011-3038 FERC PDF (Unofficial) ~0/11/2013 

Docket No. EC13-93-000 - 25-

Ameren Resources Generating to value those assets at significantly lower values (the 

2012 impairment). 65 Illinois Municipal maintains that the sale price for the Proposed 

Transaction provides strong evidence that the real value of the generating assets is no 

more than $439 million. Illinois Municipal argues that the Commission should require 

the assets be valued at that amount following completion of the Proposed Transaction.66 

68. Illinois Municipal states that the accounting entries that Applicants have provided 

do not reflect a proper reduction in generation facility asset values, as the Securities and 

Exchange Commission (SEC) requires in accordance with SEC Staff Accounting Bulletin 

112. In this regard, Illinois Municipal maintains that "the stage is being set" for Dynegy 

to acquire those facilities for about $439 million, but to carry them on its books at the 

"improperly inflated valuation" now recorded on Ameren Energy Generating's and 

Ameren Resources Generating's books. Illinois Municipal argues that Dynegy should be 

required to "push down" the purchase accounting adjustments to the books of Ameren 

Energy Generating and Ameren Resources Generating. It also argues that if the 

generation facilities are not valued at the lower amount, the improperly inflated asset 

values will result in Illinois Municipal being overcharged under its contract.67 

69. Illinois Municipal argues that the Commission's main objective when considering 

a merger's effect on rates is to protect captive customers that are served under cost-based 

rates. Illinois Municipal maintains that its status as an Ameren family (soon to be 

Dynegy family) wholesale customer is the same as that of a captive customer that is 

required to obtain power from the merging utilities and pay cost-based rates for it. 

Illinois Municipal asserts that Applicants' claim that the contract between Ameren 

Marketing and Illinois Municipal is beyond the Commission's concern since it was 

entered into under Ameren Marketing's market-based rate authority "badly misstates" the 

Commission's policy and holdings in orders upon which Applicants rely. Quoting from 

these orders, Illinois Municipal maintains that the fact that contracts at issue were entered 

under a utility's market-based rate authority was not a determinative factor, as Applicants 

claim. Rather, Illinois Municipal maintains that the determinative factor in these cases 

was that the rates charged under the contracts at issue would not be affected by the 

65 Illinois Municipal Protest at 8-9. The 2012 impairment is discussed in more 

detail below. 

66 d I< . at 10, 16. 

67 ld. at 14-16. 
Electronic Filinn - Recived, Clerk's Office: 10/1712013 

201)1011-3038 FERC PDF (Unofficial) iD/11/2013 

Docket No. ECB-93-000 - 26-

merger because market-based rates, unlike cost-based rates, are set by the market and not 

the merging companies' costs. 68 

70. Illinois Municipal argues that, unlike market-based rate contracts, where the entity 

surviving the merger can assume the contract without change to the contract's rates, 

terms, and conditions because the contract rates are unaffected by the transaction, in this 

case the Proposed Transaction will have "an immediate, substantial and detrimental 

impact" on the cost-based rates that Illinois Municipal pays because of "the resulting 

cost-structure of the new parent company."69 Illinois Municipal maintains that, absent 

Commission-imposed conditions, Applicants are positioned to inflate Illinois Municipal's 

cost-of-service with new or overstated costs generated solely by the Proposed 

Transaction as a result of Applicants' accounting and asset valuations. 70 Illinois 

Municipal argues that the Commission should set the Proposed Transaction for full 

evidentiary hearing in ,order to develop conditions to ensure that Illinois Municipal is held 

harmless as a result of the Proposed Transaction.71 

71. Missouri Joint Municipal states that it estimates that the Proposed Transaction will, 

increase its cost-based payment under its contract with Ameren Marketing in an amount 

that poses the risk of significant rate impacts, and it maintains that it should be protected 

from those impacts. 72 Missouri Joint Municipal states that the fleet of Ameren Energy 

Generating resources currently providing service under the contract is a mix of coal- and 

gas-fired facilities, but if tile Proposed Transaction is approved as proposed, the fleet of 

resources owned by tile seller under the contract, i.e., Dynegy, would be quite different, 

since it would consist only ofDynegy's current coal-fired units and Ameren Energy 

Generating's CtUTent coal-fired units, but would not include any gas-frred generation (i.e., 

the three gas-frred units that will be transferred to Medina Valley prior to closing). 

Missouri Joint Municipal maintains that tile absence of gas-fired generation will increase 

its total annual charges under tile contract.73 

68 /d. at 16-19 (citing Exelon Corp., 112 PERC~ 61,011, at P 210 (2005); 

Duquesne Light Holdings, Inc., 117 PERC~ 61,326, at P 25 (2006)). 

69 !d. at 19-20. 

70 /d. at 20-21. 

71 /d. at 22. 

72 Missouri Joint Municipal Protest at 5-6. 

73 /d. at 4. 
· Ele~::trnni.c Filing,- Re~::iverJ. Clerk's Office : 10/17/2013 

20131011-3038 FERC PDF 0)nori~c~a~r ~o/i11201~ 

Docket No. EC13-93-000 -27-

72. Missouri Joint Municipal maintains that the Commission's view that ratepayer 

protections are not needed for contracts formed under market-based rate authority is 

expressly premised on the assumption that the rates under such contracts are not 

cost-based and therefore would not be directly affected by merger transactions. It 

maintains that the Commission has recognized that rate protections may still be required 

in those situations where the rates established under a market-based contract depend on 

the seller's actual cost of service. 74 

73. Missouri Joint Municipal notes that Applicants argue that Order No. 669limits the 

Commission's wholesale customer protection focus to captive customers. Missouri Joint 

Municipal answers that, while Order No. 669 sets forth the Commission's main objective 

in implementing its new cross-subsidization responsibilities under the Energy Policy Act 

of2005, it does not confme the Commission's effect on rates analysis to captive 

customers and thus alter the scope of the Commission's obligations under its statutory 

responsibility to approve merger applications only if it finds that the transaction is 

consistent with the public interest.7 

74. Missouri Joint Municipal argues that, consistent with the Merger Policy 

Statement's emphasis on ratepayer protections, the Commission should require, as a 

condition of its approval of the Proposed Transaction, that Applicants permit Missouri 

Joint Municipal to terminate its power contract with Ameren Marketing within 90 days 

after the closing of the Proposed Transaction or require that Missouri Joint Municipal be 

held harmless from all adverse rate impacts of the Proposed Transaction that would 

otherwise flow through the contract.76 

c. Applicants' Answer 

75. In their answer, Applicants state that they offered a rate freeze commitment with 

respect to the Electric Energy OATT and reactive power rates for Ameren Energy 

Generating's and Ameren Energy Resources' generating units, including those to be 

74 Id. at 7-8 (citing Cinergy Corp., 140 FERC ~ 61,180, atP 41 (2012) (finding 

that the proposed transaction would not adversely affect wholesale rates because, when 

there are market-based rates, the effect on rates is not of concern); Union Elec. Co., 

114 FERC ,[ 61,255, at P 45 (2006) (finding that rate protections were not needed 

because wholesale service was provided at market-based rates that were not affected by 

the cost of service)). 

75 !d. at 8 n.7. 

76 Id. at 12. 
Electronic Filinn- Recived. Clerk's Office: 10/1712013 

20131011-3038 FERC PDF lUnofhcial) ~0/llr2013 

Docket No. EC13-93-000 -28-

transferred to Medina Valley. They maintain that, under Commission precedent, nothing 

more should be required concerning the.effect of the Proposed Transaction on rates. 77 

76. Responding to Municipal Protesters' claim that they pay Ameren Marketing "costbased rates" for wholesale capacity and energy, Applicants argue that the question is not 

whether the Municipal Contracts are cost-based; rather, the operative question is how 

these contracts are regulated. In this regard, Applicants assert that contract rates 

negotiated in the marketplace under a seller's market-based rate authorization are, as 

recognized by the Commission in Order No. 669, "constrained by competition, regardless 

ofthe seller's costs."78 Applicants assert that Municipal Protesters' rates were negotiated 

pursuant to Ameren Marketing's market-based rate authority, and that, while both 

customers had access to other suppliers, they elected to execute contracts with Ameren 

Marketing. Applicants note that neither of the Municipal Customers has suggested that 

the contracts should have been filed with the Commission as cost-of-service regulated 

contracts. They argue that the fact that "the formula rates fluctuate with changes in costs 

is simply the operation of a pricing mechanism (i.e., a formula rate) that these parties 

chose in arm's-length negotiations." Applicants state these are not "cost-of-service 

regulated contracts" but rather "market-regulated formula rates.''79 

77. In addition, Applicants state that Municipal Protesters confuse market-based rates 

with stated rates, noting that Illinois Municipal's argument that market-based rates do not 

require protection because they "can be assumed by the surviving entity without change 

to the rates, terms and conditions of the contract ... " in fact describes stated rates. 80 In 

this regard, Applicants reiterate that Municipal Protesters could have negotiated a fixedprice contract, but instead opted for the risks and benefits of a fluctuating formula rate.81 

78. Applicants state that Municipal Protesters chose to contract for service under rates 

that fluctuate based on many factors, and they knowingly accepted the risks of any 

number of factual changes that would impact their rates, including a sale of assets. 

Applicants state that Municipal Protesters also contracted for the possibility that such 

fluctuations could lead to rate decreases. 82 Applicants state that even if the Commission 

77 Applicants Answer at 17. 

78 Id. at 20 (citing Order No. 669, FERC Stats. & Regs.~ 31,200 at P 166 n.l18). 

79 ld . at 2 1. 

80 I d. at 21-22 (quoting Illinois Municipal Protest at 20). 

81 Id. at 22. 

82 Id. at 17-18. 
EIP.ctrnnic. Fil\'ng -

1 Recived, Clerk's Office: 10/1712013 

20131011-3038 FERC PDF TUno!£lc>al -0 ll(2013 

Docket No. EC13-93-000 -29-

views potential rate changes as directly attributable to the Proposed Transaction, such 

changes are not the types of adverse rate impacts with which the Commission has been 

concerned in reviewing section 203 applications. Applicants state that Municipal 

Protesters were not captive wholesale customers when they negotiated their contracts, as 

they did not meet ilie Commission's definition of captive customers as "any wholesale or 

retail electric energy customers served by a franchised public utility under cost-based 

regulation. "83 

79. Applicants dispute Illinois Municipal's claim that it is required to obtain power 

from the merging utilities and pay cost-based rates for iliat power. Applicants argue iliat 

Illinois Municipal is not required to obtain power from Ameren Marketing or any oilier 

Ameren entity, or to pay cost-based rates. According to Ap£licants, Illinois Municipal's 

obligations arise from a voluntary contractual arrangement. 4 

80. Finally, Applicants reject Illinois Municipal's argument that ilie Commission 

should require a post-closing compliance filing "to ensure that any post-transaction 

accounting adjustments only accrue to its [Illinois Municipal's] benefit."85 They note 

that, while Illinois Municipal argues iliat Ameren Energy Generating's accounting entries 

are insufficient because they do not reflect a proper reduction in power plant asset values, 

as required by the SEC in accordance wiili SEC Staff Accounting Bulletin 112, Illinois 

Municipal fails to note iliat SEC Staff Accounting Bulletin 112 does not require that push 

down accounting be used with respect to the acquired generating assets.86 

d. Commission Determination 

81. We fmd iliat ilie Proposed Transaction will not have an adverse effect on rates 

under our section 203 analysis. 

82. Regarding Illinois Municipal's argument that the Commission should require that 

the asset valuations ofilie transferred facilities in Dynegy's hands be decreased to reflect 

the 2012 impairment of the Ameren Merchant Utilities' generation facilities, we note iliat 

the 2012 impairment predated, and was not ilie result of, Applicants' agreement to 

undertake ilie Proposed Transaction. We express no view regarding the requirements of 

SEC Staff Accounting Bulletin 112 as it would apply to rates charged to Illinois 

Municipal under its contract wiili Ameren Marketing after the Proposed Transaction 

83 !d. at23 (quoting 18 C.F.R. § 33.1(b)(5) (2013)). 

84 !d. at 24. 

85 !d. at 29. 

86 !d. 
. Electronic Filinn- Recived. Clerk's Office: 10/1712013 

20131011-3038 FERC PDF (Unofficial) "'ta/hnau 

Docket No. EC13-93-000 -30-

closes. Further, because the contract at issue was entered into under Ameren's marketbased rate authorization, which includes a waiver of the Uniform System of Accounts 

(USofA), we will not prescribe any specific accounting requirements to Ameren 

Marketing for the Proposed Transaction. Any dispute between Illinois Municipal and 

Ameren Marketing regarding Dynegy's accounting for the Proposed Transaction should 

be resolved in accordance with any dispute resolution provision of the contract or by 

judicial proceedings. 

83. Municipal Protesters' argument that there will be an adverse effect on rates 

concerns the treatment of market-based rates that incorporate a cost-of-service formula. 

In the case of market-based rates, the Commission has found that: 

[w)here customers are served under market-based regulation as opposed to 

cost-based regulation, it is presumed that the seller has no market power 

over a customer and that the customer has a choice of suppliers; thus, there 

is less opportunity for a customer to involuntarily be in a situation in which 

its rates subsidize or support another entity .

87 

84. The Commission's policy on ratepayer protection in section 203 proceedings takes 

this fmding into account. Our main objective is the protection of ratepayers served under 

a regime of cost-of-service regulation for wholesale sales or transmission service. This 

policy is encapsulated in the goal of protecting "captive customers." The Commission 

defines the term "captive customers" for purposes of its section 203 regulations as "any 

wholesale or retail electric energy customers served by a franchised public utility under 

cost-based regulation."88 Neither Illinois Municipal nor Missouri Joint Municipal is a 

captive customer under this definition. 

85. Illinois Municipal argues that it is a captive customer on the grounds that "captive 

customers are required to obtain power from the merging utilities and to pay cost-based 

rates for that power." It maintains that this is "exactly [Illinois Municipa~'s status as an 

Ameren family (soon to be Dynegy family) wholesale power customer."8 However, 

Illinois Mw1icipal is neither served by a franchised public utility nor served under 

cost-of-service regulation. It is served under a contract it freely negotiated in an arm's 

length transaction, and the contract is authorized under market-based regulation. 

87 Cross-Subsidization Restrictions on Affiliate Transactions, Order No. 707, 

FERC Stats. & Regs.~ 31,264, at P 42, order on reh 'g, Order No. 707-A, FERC Stats. & 

Regs. ~ 31,272 (2008). 

88 18 C.F.R. § 33.l(b)(5) (2013) (emphasis added). 

89 Illinois Municipal Protest at 1 7. 
Docket No. ECB-93-000 - 31 -

Moreover, while Illinois Municipal states that it is "required to obtain" power from the 

merged company, this requirement is the result of contractual obligations that it freely 

assumed, not because of the absence of competitive alternatives. 

86. Missouri Joint Municipal argues that when the Commission chose to single out 

captive customers in its section 203 analysis, it was speaking in the context of 

implementing its new cross-subsidization responsibilities under the Energy Policy 

Act of 2005. Missouri Joint Municipal maintains that confining the analysis of a 

merger's effect on rates to captive customers is inconsistent with Commission precedent, 

as this precedent encompasses impacts on cost-based rates approved under market-based 

rate authority. This is incorrect. 

87. While the Commission propounded the formal definition of captive customers in 

its regulations in the course of implementing its new cross-subsidization responsibilities, 

it made clear that this action represented a continuation of longstanding policy. The 

Commission stated that 

[i]n our Merger Policy Statement, the Commission explained that, in 

determining whether a merger is consistent with the public interest; one of 

the factors we consider is the effect the proposed merger will have on rates. 

The Commission's main objective in applying this factor is to protect 

captive customers who are served under cost-based rates that could be 

adversely affected by a section 203 transaction. The new provision in 

amended section 203(a)(4) concerning cross-subsidization is rooted in . "1 90 Simi ar concerns. 

88. Missouri Joint Municipal cites a number of Commission cases that it maintains 

show that the Commission's policy that ratepayer protections are not needed in 

section 203 proceedings for contracts formed under market-based rate authority is 

"expressly premised" on the assumption that the rates in question are not cost-based. 

However, Missouri Joint Municipal does not identify any cases where the Commission 

has addressed in a section 203 proceeding the issue of cost-based rates under contracts 

entered into under a seller's market-based rate authority. For instance, Missouri Joint 

Municipal notes that, in one case, the Commission stated that the transaction would "not 

adversely affect wholesale rates" because "when there are market-based rates, the effect 

on rates is not of concern."91 Missouri Joint Municipal then points out that the 

Commission went on to say that "[t]he effect on rates is not of concern in these 

90 Order No. 669, FERC Stats. & Regs. 1 31,200 at P 166. 

91 Missouri Joint Municipal Protest at 7 (quoting Cinergy Corp., 140 FERC 

161,180, at P 41 (2012)). 
EIBctrnnic.Fi!i1

ng -

1

Recived, Clerk's Office: 10/17/2013 

20131011-3038 FERC PDF (Uno"fhoa .• 0 11/2013 

Docket No. EC 13-93-000 - 32-

circumstances because market-based rates will not be affected by the seller's cost-ofservice and, thus, will not be adversely affected by the Proposed Transaction."92 

However, Missouri Joint Municipal fails to note that these two statements are preceded 

by an essential express premise --the statement that no captive customers were 

involved. 93 In short, the Commission was speaking to the issue of effects on cost-ofservice as it pertains to customers served under cost-of-service regulation, not to all 

instances where a cost-of-service formula is used. A market-based rate can be set based 

on a number of factors (including cost) that the parties negotiate. The fact that parties to 

a transaction entered into under market-based rate authority negotiate a price that is equal 

to cost does not mean that the customer is thereby being served under cost-based 

regulation. 

89. We accept Applicants' rate freeze proposal with respect to Electric Energy's 

OATI and the reactive power contracts, as it provides additional assurance that the 

Proposed Transaction does not result in an adverse effect on rates. In the Merger Policy 

Statement, the Commission noted that a rate freeze is one method for ensuring no adverse 

effect on rates. We also note that a rate freeze does not insulate a party from a rate 

reduction if the Commission, pursuant to section 206, determines that the utility's rates 

are no longer just and reasonable. 94 · 

4. Effect on Regulation 

a. Applicants' Analysis 

90. Applicants state that the Proposed Transaction will have no adverse effect on the 

effectiveness offederal or state regulation. They state that the Proposed Transaction will 

not impair or have any effect on: (i) the ability of the Commission to regulate rates for 

wholesale power sales or transmission service provided by Applicants or their affiliates; 

or (ii) the ability of the Illinois Commission to regulate Ameren Marketing as an 

Alternative Retail Electric Supplier. 

b. Commission Determination 

91. We find that neither state nor federal regulation will be impaired by the Proposed 

Transaction. The Commission's review of a transaction's effect on regulation focuses on 

ensuring that it does not result in a regulatory gap at the federal or state level.95 We find 

92 Id. 

93 Cinergy Corp., 140 FERC ~ 61,180 at P 41. 

94 Merger Policy Statement, FERC Stats. & Regs. ~ 31,044 at n.52. 

95 Merger Policy Statement, FERC Stats. & Regs.~ 31,044 at 30,124. 
Electronic FilinD - Recived. Clerk's Office: 10/1712013 

20131011-3038 FERC PDF (UnoHinal) "J.o/hT2013 

Docl(et No. EC13-93-000 - 33-

that the Proposed Transaction will not create a regulatory gap at the federal level, because 

the Commission will retain its regulatory authority over the jurisdictional assets after the 

transaction. We note that no party alleges that regulation would be impaired by the 

Proposed Transaction, and no state commission has contested Applicants' assertion that 

there are "no affected state commissions" or requested that the Commission address the 

issue of the effect on state regulation. 

5. Cross-Subsidization 

a. Applicants' Analysis 

92. Applicants state, based on facts and circumstances known to them or that are 

reasonably foreseeable, that the Proposed Transaction will not result in, at the time of the 

Proposed Transaction or in the future: (1) any transfers of facilities between a traditional 

public utility associate company that has captive customers or that ovms or provides 

transmission service over jurisdictional transmission facilities, and an associate company; 

(2) any new issuances of securities by a traditional public utility associate company that 

has captive customers or that owns or provides transmission service over jurisdictional 

transmission facilities, for the benefit of an associate company; (3) any new pledge or 

encumbrance of assets of a traditional public utility associate company that has captive 

customers or that owns or provides transmission service over jurisdictional facilities, for 

the benefit of an associate company; or (4) any new affiliate contracts between a nonutility associate company and a traditional public utility associate company that has 

captive customers or that owns or provides transmission service over jurisdictional 

transmission facilities, other than non-power goods and services agreements subject to 

review under sections 205 and 206 of the FP A. 

93. Regarding the fourth prong of Applicants' verification described above, 

Applicants state that the Transaction Agreement provides for the acceptance by Ameren 

Energy Generating and Ameren Resources Generating of certain enviromnentalliabilities 

(or the potential therefore) through the Liability Assumption Agreements. Applicants 

state that the Liability Assumption Agreements, which amend certain historical contracts 

to implement such acceptance, are for the benefit of Ameren's utility subsidiary, Ameren 

Illinois, and, according to Applicants, they therefore are not the type of affiliate 

agreement that gives rise to inappropriate cross-subsidization. 

94. Applicants also state that while Ameren Illinois is not an Applicant, Applicants 

disclose that Ameren lilinois' public utility assets are currently encumbered under the 

Ameren Illinois mortgage indenture (secured by substantially all Ameren Illinois property 

formerly owned by Illinois Power Company and Central Illinois Public Service 

Company) and the CILCO mortgage indenture (secured by substantially all Ameren 

Illinois property formerly ovmed by Central Illinois Light Company). 
Electronic Filinn -

1

Recived. Clerk's Office: 10/17/2013 

20131011-3038 FERC PDF (Unol'f1cial) 'l.o 11/2013 

Docket No. EC13-93-000 - 34 -

b. Commission Determination 

95. Based on the representations as presented in the Application, we fmd that the 

Proposed Transaction will not result in cross-subsidization or the pledge or encumbrance 

of utility assets for the benefit of an associate company. 

6. Other Issues 

a. Change in Status 

96. Order No. 652 requires that sellers with market-based rate authority timely report 

to the Commission any change in status that would reflect a departure from the 

characteristics the Commission relied upon "in granting market-based rate authority. 96 To 

the extent that the foregoing authorization results in a change in status, Applicants are 

advised that it must comply with the requirements of Order No. 652. In addition, 

Applicants shall make any appropriate filings under section 205 of the FPA to implement 

the proposed transaction. 

b. Accounting Analysis 

97. In the Proposed Transaction, Dynegy will acquire the majority of Ameren's 

existing merchant generating assets, and the remaining generating assets will be 

transferred to Medina Valley. To the extent the Proposed Transaction affects the books 

of a jurisdictional entity subject to the Commission's Uniform System of Accounts,97 the 

jurisdictional entity must submit its final accounting entries within six months of the date 

the Proposed Transaction is consummated. 98 The accounting submission must provide all 

accounting entries and amounts related to the Proposed Transaction, including any costs 

96 Reporting Requirement for Changes in Status for Public Utilities with MarketBased Rate Authority, Order No. 652,70 Fed. Reg. 8,253 (Feb. 18, 2005), FERC Stats. & 

Regs.~ 31,175, order on reh'g, 111 FERC ~ 61,413 (2005). See 18 C.F.R. § 35.42 

(2013). 

97 18 C.F.R. pt. 101 (2013). 

98 Applicants state that Ameren Illinois' books will be affected by the Proposed 

Transaction because the generating plants to be transferred were previously owned by 

predecessors of Ameren Illinois, causing certain ancillary tax implications. Application 

atn.98. 
Docket No. EC13-93-000 - 35 -

incurred to effectuate the transaction, 99 along with narrative explanations describing the 

basis for the entries. 

c. Reliability and Cyber Security Standards 

98. Information and/or systems connected to the bulk power system involved in this 

transaction may be subject to reliability and cyber security standards approved by the 

Commission pursuant to FPA section 215. Compliance with these standards is 

mandatory and enforceable regardless of the physical location of the affiliates or 

investors, information databases, and operating systems. If affiliates, personnel or 

investors are not authorized for access to such information and/or systems connected to 

the bulk power system, a public utility is obligated to take the appropriate measures to 

deny access to this information and/or the equipment/software connected to the bulk 

power system. The mechanisms that deny access to information, procedures, software, 

equipment, and the like, must comply with all applicable reliability and cyber security 

standards. The Commission, North American Electric Reliability Corporation, or the 

relevant regional entity may audit compliance with reliability and cyber security 

standards. 

The Commission orders: 

(A) The Proposed Transaction is hereby authorized, as discussed in the body of 

this order. 

(B) Applicants and any affiliates of the Applicants subject to the Commission's 

Uniform System of Accounts shall account for the Proposed Transaction in accordance 

with Electric Plant Instruction No.5 and Account 102 of the USofA. Such companies 

shall submit their fmal accounting entries within six months of the date that the Proposed 

Transaction is consummated, and the accounting submission shall provide all the 

accounting entries and amounts related to the Proposed Transaction along with narrative 

explanations describing the basis for the entries. 

(C) Applicants must inform the Commission within 30 days of any material 

change in circumstances that departs from the facts the Commission relied upon in 

granting the Application. 

99 These costs may include, but are not limited to, intemallabor costs, legal, 

consulting, and professional services incurred to effectuate the transaction. 
~IP.r.trnnic Filipn- RP.r:ived, Clerk's Office: 10/1712013 

20131011-3038 FERC PD~ l'Ono1'I'~c~a~ "Lo/iiT2013 

Docket No. EC13-93-000 - 36-

(D) The foregoing authorization is without prejudice to the authority of the 

Commission or any other regulatory body with respect to rates, service, accounts, 

valuation, estimates or determinations of costs, or any other matter whatsoever now 

pending or which may come before the Commission. 

(E) Nothing in this order shall be construed to imply acquiescence in any 

estimate or determination of cost or any valuation of property claimed or asserted. 

(F) The Commission retains authority under sections 203(b) and 309 of the 

FP A to issue supplemental orders as appropriate. 

(G) Applicants, to the extent that they have not already done so, shall make any 

appropriate fllings under section 205 of the FPA, as necessary, to implement the 

Proposed Transaction. 

(H) Applicants shall notify the Commission within 10 days of the date on which 

the Proposed Transaction is consummated. 

By the Commission. 

(SEAL) 

Nathaniel J. Davis; Sr., 

Deputy Secretary.